Electricity for West Texas and Southern New Mexico | El Paso Electric

Notice of Proceeding & Hearing for Solar Generation/Storage Project at New Mexico State University

BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

IN THE MATTER OF EL PASO ELECTRIC )

COMPANY’S APPLICATION FOR A )

CERTIFICATE OF PUBLIC CONVENIENCE )

AND NECESSITY TO CONSTRUCT A SOLAR ) Case No. 19-00350-UT

GENERATION/STORAGE PROJECT AT NEW )

MEXICO STATE UNIVERSITY AND FOR )

APPROVAL OF A SPECIAL RATE CONTRACT )

)

NOTICE OF PROCEEDING AND HEARING

NOTICE is hereby given by the New Mexico Public Regulation Commission (“Commission” or PRC) of the following matter:

On November 20, 2019, El Paso Electric Company (EPE or “Company”) filed an Application with the Commission for a Certificate of Public Convenience and Necessity (CCN) to construct a solar generation/storage project at New Mexico State University (NMSU) and for approval of a Special Rate Contact between EPE and NMSU to recover the costs of the proposed facility.

EPE filed the Application in accordance with applicable requirements of the New Mexico Public Utility Act (PUA), specifically NMSA 1978, §§ 62-9-1 (New Construction), 62-9-6 (Certificates), and 62-6-26 (Economic Development Rates), the Commission’s Final Order in Case No. 09-00171-UT, and EPE’s Load Retention Rate, Sixth Revised Rate No. 30.

As detailed in the Application and supporting testimony, EPE seeks a CCN to build, own and operate a 3 megawatt (MW), microgrid-ready, ground-mounted, single-axis solar photovoltaic generating facility coupled with a 1 MW, 4 megawatt-hour battery storage system on NMSU property located within Arrowhead Park, a research park established by the NMSU Regents under the University Research Park and Economic Development Act, NMSA 1978, §§ 21-28-1 to -25 (1989, as amended through 2007), in Doña Ana County, New Mexico, to be designated as the NMSU Project (the “Project”). If approved, Project construction is scheduled to begin in 2020, and the Project is scheduled to be in service in 2021.

EPE is also requesting approval of a Special Rate Contract. The Special Rate Contract is designed to recover the full costs of the Project from NMSU. EPE states that it will not seek approval to include the cost of the Project in rate base. EPE further states that there will be no cost or rate impact on other customers.

EPE explains that it is seeking expedited approval of the Application because the favorable federal Investment Tax Credit (ITC) will change, effective at the end of 2020, so EPE says it needs timely approval to incorporate the ITC benefits for construction in 2020. If approved, Project construction is scheduled to begin in 2020 to be eligible for 2020 ITC benefits (26 percent), and the Project is scheduled to be in service in 2021.

EPE states that the Project is being designed, built, and operated at the request of NMSU on land owned by NMSU to supply a portion of NMSU’s electric utility load with renewable energy and storage and to provide NMSU’s students and faculty with an environment for educational and research purposes.

EPE states that it conducted a competitive request for proposal (RFP) process to select the facility for the Project. EPE selected the RFP bid made by Affordable Solar, Inc.

EPE estimates capital construction cost for the Project is approximately $6.7 million. In addition, other capital costs for the Project include the following: interconnection costs of approximately $405,650, estimated AFUDC (allowance for funds used during construction) of approximately $262,783, fencing of $261,000, capitalized administrative and general (A&G) costs, and other expenses of $200,004, for a total capital cost of $7.838 million. This cost does not reflect the 26% ITC for which this project will be eligible if project construction begins in 2020. EPE states that the full cost of the facility will be recovered through the sale of energy to NMSU, and EPE will not seek to include the costs of the facility in rate base.

With regard to the request for approval of the Special Rate Contract, EPE asserts that it is statutorily permitted to enter into mutually agreeable special rate contracts with its retail customers for purposes of load retention pursuant to NMSA 1978, § 62-6-26 (1989, as amended through 2015).

EPE maintains that the contract is of mutual benefit to NMSU and EPE. EPE further maintains that the contract provides savings and benefits to NMSU, ensures power supply and delivery, and provides NMSU students and faculty with an environment for educational and research purposes. EPE states that the contract rates are designed to recover all costs of the Project from NMSU.

On December 11, 2019, the Commission issued an Order appointing the undersigned Hearing Examiner to preside over this matter.

On January 16, 2020, Merrie Lee Soules filed a Protest against approval of the relief sought in the Application pursuant to NMSA 1978, § 62-9-1(C). Accordingly, pursuant to Section 62-9-1(C) of the PUA, the Commission must issue its order granting or denying the Application within nine months from the date of filing or by August 20, 2020.

Further information regarding this case can be obtained by contacting EPE or the Commission at the addresses and telephone numbers provided below. Additional details regarding the procedural requirements for this proceeding are set forth in the Procedural Order issued by the Hearing Examiner on February 13, 2020. All inquiries or written comments concerning this matter should refer to Case No. 19-00350-UT.

The present procedural schedule for this case is as follows:

Any person desiring to become a party (“intervenor”) in this case shall file a motion for leave to intervene in conformity with Rules 1.2.2.23(A) and 1.2.2.23(B) NMAC by no later than March 27, 2020.
A settlement conference attended by EPE, intervenors, and Staff shall be held on April 6, 2020 at a location to be determined. The settlement meeting date may be changed, if necessary, at the discretion of the parties. The parties also may hold subsequent settlement meetings at their discretion.
On or before April 28, 2020, Staff of the Commission’s Utility Division (“Staff”) shall file, and any intervenor may file, direct testimony. Alternatively, should a settlement be reached among all or some of the parties, a stipulation shall be filed no later than April 28, 2020.
If a stipulation is filed as provided for above, EPE and Staff shall, and any intervenor may, file direct testimony regarding the stipulation on or before May 8, 2020. Alternatively, any rebuttal testimony to the direct testimony submitted April 28, 2020 shall be filed on or before May 8, 2020.
Any rebuttal testimony to the direct testimony regarding a stipulation shall be filed on or before May 20, 2020.
A public hearing on this matter shall be held on June 4, 2020, commencing at 9:30 a.m. in the Ground Floor Hearing Room of the Commission in the P.E.R.A. Building, 1120 Paseo de Peralta, Santa Fe, New Mexico, and shall continue if necessary, on June 5, 2020.

Interested persons may appear at the time and place of hearing and make oral or written comment pursuant to 1.2.2.23(F) NMAC without becoming an intervenor. Comments shall not be considered as evidence in this case. See 1.2.2.23(F) NMAC. Written comments, which shall reference Case No. 19-00350-UT, may be sent to the Commission at: New Mexico Public Regulation Commission; Attention: Melanie Sandoval, Records Management Bureau, P.E.R.A. Building, 1120 Paseo de Peralta, P.O. Box 1269, Santa Fe, NM 87504-1269, Telephone: (505) 827-6968.

Interested persons should contact the Commission at (505) 827-6956 for confirmation of the hearing date, time, and place since hearings are occasionally rescheduled or, if deemed not required or necessary, canceled at the discretion of the Hearing Examiner or Commission.

EPE’s Application, together with the supporting pre-filed direct testimony, and any exhibits and related papers, may be examined by any interested person at its offices, 201 N. Water, Las Cruces, New Mexico, telephone number (575) 526-5551, or accessed on EPE’s website at www.epelectric.com/company/public-notices.

The public record for this case may be examined in person at the Commission’s Records Bureau in the P.E.R.A. Building, 1120 Paseo De Peralta, Santa Fe, New Mexico, (505) 827-6968. The record may also be accessed on the Commission’s website at http://www.nmprc.state.nm.us/ under “Case Lookup E-docket.”

Anyone filing pleadings, testimony, and other documents shall file either in person with the Commission’s Records Management Bureau in the P.E.R.A. Building in Santa Fe, New Mexico, or by mail addressed to: New Mexico Public Regulation Commission; Attention: Melanie Sandoval, Records Management Bureau, P.E.R.A. Building, 1120 Paseo de Peralta, P.O. Box 1269, Santa Fe, NM 87504-1269. The following physical address shall be used only for special or hand deliveries: Records Management Bureau’s fourth floor office, 1120 Paseo de Peralta, Santa Fe, NM 87501. All filings shall be served on the parties of record and Staff on the date of filing as specified in the most recent Certificate of Service (“Official Service List”) issued in accordance with 1.2.2.10(C)(4) NMAC. Unless otherwise requested or ordered, parties shall serve all pleadings, testimony, and other filings by email only.

All filings shall be emailed to the Hearing Examiner on the date filed at anthony.medeiros@state.nm.us by no later than 5:00 p.m. Mountain Prevailing Time. Such filings shall include the Word or other native version of the filing (e.g., Excel or Power Point) if created in such format. Any filings not emailed to the Hearing Examiner in compliance with the foregoing requirements are subject to being summarily rejected and stricken from the record in the Hearing Examiner’s discretion.

The procedural dates and requirements established by the Hearing Examiner are subject to further order or ruling of the Hearing Examiner or Commission. The Commission’s Rules of Procedure under 1.2.2 NMAC shall apply in this case except as modified or varied by order of the Hearing Examiner or Commission. The Rules of Procedure can be obtained from the offices of the Commission and are available online at the official New Mexico Administrative Code website, http://www.nmcpr.state.nm.us/nmac/.

Any person with a disability requiring special assistance in order to participate in this proceeding should contact the Commission at least 24 hours prior to the commencement of the hearing, at either (505) 827-4500 or 888-427-5772.

ISSUED at Santa Fe, New Mexico this 13^th day of February 2020.

NEW MEXICO PUBLIC REGULATION COMMISSION

Anthony F. Medeiros

Hearing Examiner